Health Insurance Costs for Baby Boomers Going Parabolic?

Working with boomer clients, I have become increasingly worried about the rising cost of medical care as it eats up more and more of a boomer’s shrinking discretionary budget.  We are all aware of the national stats but let me share some more personal, anecdotal stories.

I recently spoke with a client who is hitting the donut hole with her prescription costs. Her medications would end up costing her over $700/month for the last 3 months of this year. The reason is that for one of her conditions, the generic medication doesn’t work nor do some of the competing medications and the only thing that works for her particular condition is a not-generic-yet brand. Unfortunately she is not alone, as the national debate carries on and on.

Some people blame health insurance companies, and some people blame health providers. Others blame people’s excessive use of medical services as something that drives up usage and costs. Bottom line – we have:

  • A LOT of people using health services, with the large number of baby boomers starting to wear down knees, elbows, and other joints; and with increasing numbers of chronic conditions
  • Reports that the US population is the fattest we’ve ever been – folks, wherever you fall on the health cost debate, you know this trend can not be good for the overall expense levels of the US health care system
  • Whatever anyone says, having a doctor visit only cost $5 makes no one think twice about possibly over-using this privilege. Copays are starting to rise ($25 or more for many), it’s still just a fraction of the actual cost, which few people appreciate
  • The costs of paperwork, record-keeping, and other admin costs add up – if we look at the publicly filed annual reports of major insurance companies, we find that their profit margins are often about 10%. Think about it this way, if health costs dropped 10% (eliminating insurance companies), would you save a lot of money? Maybe for one year til your premiums rose the next year by 15%! Admin costs are killer.
  • Medical malpractice insurance premiums for og/gyn physicians cost over $100,000/year per physician in New Jersey. Think about the math – if an ob/gyn spends $100,000 on “medmal,” $100,000 on annual rent, $300,000+ on salaries of her staff, office expenses of $150,000 and many other items that cost money – you can see that some physicians need $600,000+ of REVENUE to simply break even. Therefore, how many annual visits does the physician need to have to cover costs and pay her own salary? The WHOLE SYSTEM IS EXPENSIVE.

What’s the point I am trying to make? Consider PREVENTION as a way to hold down medical costs. It was the only advice I could offer my client due to her particular circumstances. For those of you that haven’t seen it, see how President Bill Clinton changed how he ate (not a “diet”) to lose tons of weight, lower cholesterol and improve his overall health:

If we can lower our use of medical services, and for a lot of people, some effort on eating right and activity would go a long way, we can make a big difference in our current AND future medical costs. And please, some people don’t want to hear the lecture on health and fitness, but from my perspective, it needs to be said. I work on some people’s financial picture and I see some serious trouble with planning for future medical needs. If some people don’t work on this, then their medical costs could eat up a SIGNIFICANT portion of their budget and their quality of life will be terrible.

The good news is many of my clients take their fitness seriously. Seriously doesn’t mean full contact kick-boxing either! It means they go for a walk everyday, they eat more veggies and fruits, and they work on engaging in a healthy social life which works wonders for mental and emotional health.

What about you? What are you doing? Care to share? Please do comment! Also, don’t forget, to get updates, article summaries, and upcoming workshop dates, join our email community in the boxes to the right —————————————————->